Tuesday, December 18, 2007

"News that Vikram Pandit will be the new chief executive officer of Citigroup, joining other Indians such as Pepsi’s Indra Nooyi (a woman) at the top of major U.S. corporations, comes at the same time that we learn that Tata Motors may buy Jaguar from Ford Motor. The Indians are on the move in several important respects and they clearly are ahead of their Chinese, Brazilian, and Russian counterparts, all members of the so-called BRIC club (Brazil, Russia, India and China.)"

My perspective on a special advantage Indians may have in a global economy relates to Emotional Intelligence: I think many Indians have is a more highly developed emotional intelligence -- derived, perhaps, from the Hindu tradition that intelligence is the gift of the mother goddess. This tradition links to Emotional Intelligence qualities such as empathy, patience, compassion, and nurturing. These skills are vital to compete successfully in a global economy and very undervalued in much of our Western world. Antoine de Saint-Exupery says (in "The Little Prince") “It is only with the heart that one can see rightly; what is essential is invisible to the eye.” He could have been from India!

We can all learn to do better at test taking - but that does not mean we are "more" intelligent. The problem, it seems to me, relates to test design. Emotional Intelligence is an aspect that was not measured by standard intelligence tests - does that make it a "new" intelligence or simply one that we did not know how to measure? There is a strong school of thought that suggests we cannot "improve" our EQ (Mayers, Salovey). But that doesn't mean that we cannot improve our emotional abilities and function "better". I may have no sense of direction, but I can learn to use a GPS system and find my way around.. Geoffey quotes an excellent article from the New Yorker which makes the point that current thinking among IQ experts is that even IQ can change, often substantially, over time, The New Yorker magazine.

"A Mexican migrant to the U.S. is five times more productive than one who stays home. Why is that?

The answer is not the obvious one: This country has more machinery or tools or natural resources. Instead, according to some remarkable but largely ignored research -- by the World Bank, of all places -- it is because the average American has access to over $418,000 in intangible wealth, while the stay-at-home Mexican's intangible wealth is just $34,000.

But what is intangible wealth, and how on earth is it measured? And what does it mean for the world's people -- poor and rich? That's where the story gets even more interesting.

Two years ago the World Bank's environmental economics department set out to assess the relative contributions of various kinds of capital to economic development. Its study, "Where is the Wealth of Nations?: measuring Capital for the 21st Century," began by defining natural capital as the sum of nonrenewable resources (including oil, natural gas, coal and mineralresources), cropland, pasture land, forested areas and protected areas.Produced, or built, capital is what many of us think of when we think of capital: the sum of machinery, equipment, and structures (including infrastructure) and urban land.

But once the value of all these are added up, the economists found something big was still missing: the vast majority of world's wealth! If one simply adds up the current value of a country's natural resources and produced, or built, capital, there's no way that can account for that country's level of income.

The rest is the result of "intangible" factors -- such as the trust among people in a society, an efficient judicial system, clear property rights and effective government. All this intangible capital also boosts the productivity of labor and results in higher total wealth. In fact, the WorldBank finds, "Human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries."

Michael Milken, the junk bond billionaire turned philanthropist is quoted as saying:"Today the strength of the world's economy is helping America and the United States, and I think that will soften the blow of our downturn in housing,'' Then he makes a comment relative to global mindset:``We have to realize, similar to the time of Galileo, that the whole world is not necessarily revolving around the United States and the amazing story of America.'' Milken, chairman of the Milken Institute, an independent economic think tank based in Santa Monica, California goes on to mention the importance of human capital: "The most important asset and the largest asset category in the United States or any country is human capital,'' . "The cure of cancer is worth $45 trillion to the U.S. economy. The elimination of heart disease as a cause of suffering and death is worth almost $50 trillion to the U.S. economy. The solution to those two problems far outweighs any other economic discussion which we could have today.''

About Me

Published two books, available on Amazon.com:
"Driving Straight on Crooked Lines: How an Irishman found his heart and nearly lost his mind."
"La historia de un Legionario de Cristo irlandés: De cómo encontró su corazón y casi perdió la razón”